On the proposed SA levy - Make the Banks Pay!

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Nick G.

South Australia’s decision to impose a copy-cat levy on big bank superprofits has been met with howls of outrage by the banks.

It follows the federal government’s recent announcement of a 0.6 percent tax on the liabilities  of the big five banks, the Commonwealth, Westpac, ANZ, NBA and Macquarie. ​(As strange as it may seem, bank profits are deemed as an accounting measure to be liabilities because they are theoretically owned by their shareholders and are theoretically liable to be reimbursed to shareholders as dividend payments.)

It should have come as no surprise to the banks. When former Prime Minister Abbott was pushing his new federalism, aimed at getting states and territories to raise more of their own revenue, one of his unlikely supporters was SA Premier Weatherill who proposed a state tax on financial transactions.

Banks: rich whingers with closed pockets

The big Australian banks are highly protected species.  They have not been required to contribute to government revenue to anything like the levels of bank taxes in other OECD countries.  This is despite their being the most profitable banks in the world. Bank profits as a percentage of GDP are two and a half times as large here as in the US and three times larger than the UK.

To say that it is high time the banks were made to cough up some of their profits to the public purse is a very generous understatement.
The most recent profits of the big banks were NAB, $6.4 billion; Westpac, $7.4 billion; ANZ, $5.7 billion; Commonwealth Bank, $9.2 billion; Macquarie, $2.2 billion.

Yet the proposed SA bank levy is of the order of one-third of one percent of their profits, or $36 in every $1,000,000!

And for this, the banks have screamed that they will be put out of business in SA, that it will ruin SA businesses and home buyers.

For this, the SA Liberal Opposition, having initially said it would not block Supply and following a meeting with bank representatives, now proposes to block the levy with the support of the Australian Conservatives and Xenophon’s Legislative Council member.

The CEO as a common thief

Those who have orchestrated the banks’ response to the SA levy, the chief executives and directors of those banks, have criminally high levels of remuneration. Criminally, because their salaries are theft from ordinary Australians in the form of bank fees and charges, and interest on loans.

Leading the charge is the Macquarie Group’s CEO at $18.5 million, followed by the CEOs of the Commonwealth ($8.7m), Westpac ($6.7m), NAB ($6.7m), and ANZ ($5m). 

That is, those five people collectively earn $44.5 million per year.

The SA bank levy aims to raise $90 million per year.

One million seven hundred thousand South Australians will share the equivalent of $26 each and this is complained about by five very high net worth individuals (aka stinking rich scum) who are rolling in multimillions per year!

And that’s just the CEO’s.  Throw in the several tens of millions of dollars each of the five banks pays to its Directors and the scale of the banks’ theft from their Australian “customers” begins to take shape.

Forget the one percent – it’s 0.02 percent at the bank

To try and spook the public, the banks and their apologists such as SA Opposition leader Stephen Marshall portray the levy as an attack on “consumers, it is going to come from business, or it is going to come from the 150,000 people in South Australia who have bank shares, or everybody's superannuation.”

Shareholding has sometimes been portrayed as “people’s capitalism”, and 150,000 seems like a large slice of the SA population. Yet “mum and dad” shareholders are very small fry in companies listed on the Stock Exchange, and banks are no exception.

Take the Commonwealth Bank for example.  It has 819,613 shareholders, some of whom would be certainly be South Australians. The vast majority, 599,302, own less than 1000 shares each. They comprise 73.12 percent of total shareholders and control 11.14 percent of the bank’s issued capital. At the other end of the scale, the 188 who own more than 100,000 shares each comprise just 0.02 percent of shareholders and control 48.64 percent of the issued capital. (Common parlance depicting the super-rich as the “one percent” is a very generous overstatement next to those 0.02 percent of the largest shareholders in the Commonwealth Bank – not that “common wealth” has ever been an accurate label for the bank.)

The proposed SA bank levy is progressive, worthwhile and just.  Like the federal levy, it’s just a drop in the ocean of what the banks could be contributing if they were nationalised entities in an independent socialist economy.

At both federal and state level, we should make the banks pay.

It won’t bring capitalism to its knees, but it will help to alleviate the fears and uncertainties for the future felt by a growing number of working, underemployed and unemployed Australians.

 

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